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What is Walmart’s Plan for Walmart Pay?

Walmart has entered into the mobile payments business, but perhaps it is not, as many suggest, a bid to gain the upper hand from the tech giants Apple, Samsung and Google in the next generation of consumer payments.

More likely Walmart is looking to engage with its customers in meaningful ways. The enhanced Walmart app with Walmart Pay will improve the one-to-one relationship Walmart has with its loyal customers. With more than 22 million monthly users, Walmart’s app already enables customers to enjoy an enhanced shopping experience with functionality such as storing shopping lists and refilling prescriptions. The new payment functionality should allow Walmart to push customer offers that alter buying habits and behaviors. If this more robust app comes with more frequent visits to Walmart or bigger basket size, it is a win for Walmart.

Let’s talk about what Walmart Pay will not do (without additional enhancements).

Bring in new customers. This is unlikely because the customer value is not a strong enough offer on its own. Walmart may be able to entice new customers to turn right to Walmart instead of left to Target if the reward/discount is great enough (e.g., something on par with the 5% discount offered by Target’s Red Card).

Keep Apple Pay and other national mobile wallets out of its store. Not likely either; eventually, consumer demand will make way for additional mobile payment options in Walmart stores.

Be consumers’ wallet of choice for transactions at other retailers. Definitely not, since Walmart Pay will be limited to transactions inside Walmart or on Walmart.com.

The Walmart Pay announcement demonstrates retailers’ continued desire for in-app solutions, but it leaves us with questions that need to be addressed.

Will Walmart allow others (Apple Pay, Chase Pay) to play at POS? If so, when?

Does this announcement signal a change in Walmart’s strategy for MCX (the Walmart-led consortium of national retailers that is developing the CurrentC mobile payment offering)?

In 2016, we should get the answers to those questions and the ultimate question: Will Walmart Pay be successful? Here’s one way to look at it—the driving force for adoption of Walmart Pay (or any mobile wallet) lies in the balance between merchant value and consumer reward; payment should be an afterthought.